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September 20, 2014

Is Erdoğan's power being exhausted?

Mümtazer Türköne

The government and President Recep Tayyip Erdoğan are clearly engaging in a polemic. A fairly premature power struggle is going on between the presidential palace and the government; analysts are curious about the course of their relations. Erdoğan is testing the boundaries of his own power by relying on his style and priorities. But he has hit a strong and solid wall. The subject matter of this premature and strong power struggle is Bank Asya. Erdoğan is relying on his prestige and power to destroy Bank Asya; he does not hide his intention, and he presents his goal as proof indicating that he is still powerful.
On the other hand, the government realizes that Erdoğan's goal of destroying a bank is a major threat and a danger in the event it happens. The government holds the burden of economic stability and equilibrium. Sinking one of the strongest banks in the banking system is only possible by destroying the entire economy through chain reactions that would be caused by the bankruptcy of that bank.

The speech the president delivered Thursday at a meeting of the Turkish Industrialists and Businessmen's Association (TÜSİAD), also known as a club of riches, was a speech of a neurotic person trying to test his power and, while doing it, insulting many. He offered a handshake to end polarization, but he also insulted businessmen because they did not support him during the corruption investigations. This is surprising, given that the same person did both. The same meeting was also a stage on which he admitted his efforts to destroy a bank. The president argued that Bank Asya was already bankrupt, despite the fact that its shares were gaining value. He intentionally continued to campaign against the bank. Bank Asya survived the assaults and attacks the president has been carrying out for a long time. Erdoğan is no longer able to sink this bank, and because of this, Erdoğan is getting extremely angry.

On his way back from Qatar, he also waged a war against credit rating agencies; the campaign he launched against the bank after his fight with the credit rating agencies has made his charisma controversial. Erdoğan should know that when you do not like a rating and disconnect with an agency, Turkey will have to pay a huge sum of interest due to the rise in risk.

Erdoğan's irresponsible statements are placing the economy in a delicate position. The frequent statements by government circles that there is no risk and that the economy is doing well are clear indicators of the unease in the markets. The government wants to address the lack of confidence in the economy and protect stability. The polemics Erdoğan and Deputy Prime Minister Ali Babacan are engaging in show that there is a huge fight going on. This is not a personal fight. Babacan seeks to strengthen the economic body, whereas Erdoğan is trying to protect an economic network and oligarchy he created through the exploitation of public opportunities. This controversy is reflected as competition between the real sector and the construction sector in the country's economy.

Babacan's recent statement that there is huge economic exploitation going on through legislative changes performed overnight was a direct reference to Erdoğan. Babacan stresses that economic growth and transparency are not possible without the proper administration of profits in the construction sector.

In a country where a president openly declares his intention to destroy a bank, what conclusion other than a lack of confidence in investment could be drawn?

Businessmen applauded Erdoğan at the TÜSİAD meeting. There is something ironic about this applause. The businessmen are trying to manage Erdoğan's broken psychology. He no longer holds much power anyway, so what harm could some applause do?

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